Avoiding the Potential Pitfalls in a Commercial Lease

For most businesses, leasing commercial space is the foundation on which future success or potential failure of the business is predicated upon. Although lease transactions may appear to be similar on the surface, the reality is that each one is as different as the businesses that desire to lease a space.

Many people that have longstanding relationships with specific Pittsburgh attorneys make assumptions about their experience when it comes to negotiating and parsing a commercial lease. The reality is that there are numerous pitfalls that are common to these leases that only the most experienced Pittsburgh law firms can see and avoid.

It is imperative for the future of any business that their commercial lease strikes the best balance of shared responsibility and risk of ownership between the landlord and the tenant. If the space, regardless of how big or small, is part of a significant portfolio of properties owned by the landlord, then they likely have a highly skilled law firm with deep experience in all aspects of commercial leasing and property management.

The hidden small costs that can be passed along to tenants in contracts by these firms can add up and eventually stifle a business’s growth. Consequently, it behooves the prospective tenant to have a law firm with equal experience in uncovering these potential pitfalls before the lease is signed.

Businesses leasing commercial space often overlook the fact that rentable square feet are not the same thing as usable square feet. This is despite the fact that the renter thinks they are paying for the latter when they are actually paying for the former. It is in the renter’s best interest to have legal representation that is skilled at negotiating commercial lease agreements to parse the language as well as the physical details of the space to uncover the true benefits and drawbacks of a particular space.

While location is obviously crucial to retail businesses, some office-based businesses see location as secondary beyond the basics of overall safety, amenities, and accessibility. The reality is that the tenant has an unfounded expectation that the chosen space within an office complex or office tower will be the same for the duration of the lease. What they don’t necessarily know is that many landlords reserve the right to relocate the tenant to another space within the building.

Moving staff and equipment as well as necessary changes to the new space may be cost prohibitive as well as add unnecessary disruptions to the business that can be highly detrimental financially and otherwise. Although these types of provisions cannot always be avoided, they can be amended to specific floors, sections of a building or that specific amenities and features are included in the new space.
Another example of a potentially hidden pitfall is the maintenance and repair aspects of a commercial lease agreement. Maintaining the condition of a leased property is something that most business owners will see as a necessary part of a good commercial lease when negotiating their commercial lease agreement. Unfortunately, they are often unaware that maintenance expenses can be broader than the renter would see as fair.

For instance, repairs to the building’s façade being prorated to the lease holders over time are fair, but a full remodel to the structures exterior may not be. Not all Pittsburgh attorneys are skilled at handling the complexities of anticipating and hammering out the details of such leasing terms in a way that ensures the best interest of the business leasing the space.

As just a fraction of the possible pitfalls that can be hidden in a commercial lease, they represent additional expenses that are both big and small. All of them add up to costs that can hamper a business and even stunt its growth in many ways.

Enlisting the advisement of Pittsburgh attorneys that have intimate understanding of the complexity and minutia of the leasing process and documentation is imperative for avoiding unexpected long-term costs. Having a commercial lease that represents your wishes, needs and expectations is the foundation for a future poised for growth and stability.